Here is the most current EIC Earned Income Credit Table. The credit maxes out at 3 or more dependents. You will not be eligible if you earned over $56,844 or if you had investment income that exceeded $3,600
Your credit should fall somewhere within these chart brackets based on your income and qualifying children. As you can see by the chart below, the EIC is a hefty tax credit you don’t want to miss out on.
|Adjusted Gross Income
| Max Single – $21,430
| Max Single – $42,158
| Max Single – $47,915
| Max Single – $51,464
How to Calculate Your Earned Income Credit Amount
The Dependents Tax Credit Calculator will give you an accurate view of how much you could be entitled to. Just answer some simple questions regarding your income and your living circumstances, and you’ll get a readout on how much you may be eligible for.
How to Claim the EIC
Your credit amount will vary depending on many different factors, such as income, family size, and filing status. The maximum amount a family can receive is over $6,700. That would be if you are married, filing jointly with three or more children.
You may also receive a smaller credit or none at all if you opted to receive an advance on your EITC or if you intentionally had an error in previous filing years, you may be denied altogether. If you think you are eligible for some amount of the credit, you should claim the credit and get a bigger tax refund.
There are some other factors that could affect the amount of your credit. Combat pay would be one of them. When it comes to combat pay, you can either claim all of it or none of it. If that was your only income, you might need to in order to qualify, but if you had other income, you might choose to exclude this pay to keep you within the income guidelines.
You can get an estimate of your credit by using the tax credit calculator. The calculator will guide you through the process and make sure you get the largest EITC and any other credits you are eligible for.
Earned Income Credit Restrictions
The federal tax return does have a few restrictions regarding the EITC. One restriction to be aware of is that the aggregate investment income cannot exceed $3600. Aggregate investment income is defined as having multiple investments (business or other revenues) that generate income. Anything higher than that, the IRS would consider the tax filer as having other ways of supporting themselves and thus would not need the EITC.
Other restrictions apply to the EIC, so it may be best to use tax software to file your taxes. This not only ensures you receive the most accurate earned income tax credit but also prevents errors from occurring. Some tax software will help you distinguish the appropriate credit to receive as well.
Earned Income Credit Opportunities and Regulations
Depending upon your status, as a taxpayer, you are entitled to additional income tax benefits offered statewide as well. Check with your state’s Department of Revenue to see how your low-income status could help you qualify for additional programs. In addition, some programs can increase your income quickly during tax time when you’ll need it the most.
An Earned Income Tax Credit regulation to be aware of is falsifying information provided when filing for the earned income tax credit. Earned Income Tax Credit fraud has raised suspicion lately. Unfortunately, the existing schemes make it hard for those truly in need of the credit. If a tax filer is caught falsifying information, a fine and other penalties would be imposed.
There are, of course, many times where errors occur completing the Earned Income Tax Credit portion of the federal tax return. The rules are so complex; it’s understandable why.
If the credit claimed is found to be unjustified or claimed in error, the IRS has the power to lower any penalties. Contrary to popular belief, the IRS is human-operated and realizes human errors happen. However, the filing instructions are quite complex and lengthy, making it difficult to comprehend, even for professional tax preparers, especially first-time tax filers.
The Bottom Line of the Earned Income Credit
Do not miss out on your EIC credit for fear of being audited. If you genuinely do qualify for the EIC credit, file for it.
You can use the Dependents Tax Credit Calculator for free and see how much you can claim.